(LEGAFI) -- Oracle Corp. (NASDAQ: ORCL), the world's second-largest software maker, agreed to pay more than $199.5 million to settle whistleblower allegations it overbilled the U.S. government for nearly a decade.

 

The Oracle settlement resolves a whistleblower lawsuit that alleges Oracle induced the General Services Administration to buy $1.08 billion in software from 1998 to 2006 by falsely promising the same discounts offered to favored commercial customers. Former Oracle employee Paul Frascella, however, blew the whistle on Oracle in 2007, claiming Oracle gave such favored companies discounts of as much as 92 percent, but only gave the government cuts ranging from 25 to 40 percent.

 

The Justice Department pursued the case after joining Fraschella's Oracle whistleblower lawsuit in federal court in Alexandria, Virginia, and filed its own complaint last year. The payout is the largest ever obtained by the GSA under the False Claims Act, which lets private citizens sue on behalf of the government and share in any recovery -- typically 15 to 25 percent of the recovered funds. Frascella will get $40 million for his help in bringing the Oracle whistleblower lawsuit.

 

"Companies that engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create and unfair advantage," Tony West, assistant attorney general of the Justice Department's civil division, said in a statement.

 

"It's more important now than ever before to make sure the taxpayer dollars are not wasted on higher prices," added GSA Inspector General Brian Miller. "We will not let contractors victimize the taxpayers by hiding their best prices."

This is not the first time Oracle has been in trouble for allegedly defrauding the government. In 2006, Oracle paid $98.5 million to settle a case over GSA pricing at PeopleSoft, Inc., a software maker Oracle bought the previous year for $10.3 billion.

 

The Oracle whistleblower lawsuit case is United States of America v. Oracle Corp., Case No. 07-cv-00529, U.S. District Court, Eastern District of Virginia (Alexandria).